Kia's Chinese joint venture makes a profit for the first time in 7 years $HYUD (+0%)
$005380

Kia's Chinese joint venture has turned a profit in the third quarter of this year, ending a seven-year losing streak

Yueda Kia, in which Kia and China's Yueda Group each hold a 50 percent stake, posted sales of 3.2 trillion won (US$2.3 billion) in the July-September period, up 60.4 percent from the second quarter. The company posted a profit of 17.2 billion won, a significant turnaround from the loss of 4.4 billion won in the previous quarter.

In 2002, Kia invested 600 million dollars to set up a Chinese joint venture with two local companies - Dongfeng Motor and Yueda Group - following the Chinese government's roadmap to limit foreign capital penetration while promoting the country's strategic industries. Dongfeng reportedly sold its 25 percent stake to Yueda in 2021.

From January to November, Kia sold 224,201 vehicles in China, an increase of 51.9 percent year-on-year, marking the first time since 2020 that annual sales exceeded 200,000 units. In November alone, the car manufacturer's monthly sales rose by 33.4 percent to 24,310 units.

Kia struggled with financial problems in China after Beijing protested against the deployment of the South Korean Terminal High Altitude Area Defense missile system in 2017.

"Kia's business in China has been boosted by the launch of new vehicles, including the K3 mid-size sedan and the larger K5 sedan," said a source who wished to remain anonymous. According to Kia, the carmaker's best-selling model in the January-October period was the Pegas sedan with 48,120 units, followed by the Forte sedan with 15,305 units and the K3 sedan with 9,667 units.

Last year, Kia also launched the EV5, a mid-size electric sport utility vehicle, which sold 9,837 units in the same period. November sales are expected to exceed the 10,000 mark. The EV5, Kia's first battery-powered car in China, is priced at 149,800 yuan (US$20,600), which compares favorably with other foreign brands such as the Tesla Model Y, which is priced at over US$30,000.

The source added that another key factor behind Kia's stellar performance is the automaker's export growth strategy, which makes its Yancheng plant a major global production center.

Since December last year, the plant has exported six car models sold in China, including the Limou